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O.C. supervisors balk at curbing treasurer's powers

Board votes to get an outside risk appraisal of county investments.

December 19, 2007|Christian Berthelsen | Times Staff Writer

Orange County supervisors Tuesday backed away from an effort to strip Treasurer Chriss Street of his authority over the county's $5.9-billion investment portfolio but at the same time voted to seek an independent risk appraisal of county investments.

The board's decision came even as the district attorney's office issued a new round of subpoenas to the treasurer's office and county executive office seeking records documenting Street's county credit card purchases, expense claims, travel and office remodeling. It also came after Street's abrupt public announcement two weeks ago that $460 million in county investments under his management faced a potential credit-rating downgrade.

It was the second time this year supervisors had balked at curtailing Street's power to manage the investments, and it served as an anticlimactic coda to months of turmoil during his first year in elected office. The vote came after presentations from supporters and from Street, who said the county's investments were safe and being managed effectively, and that having the portfolio overseen by non-elected civil servants also posed potential hazards.

The board did not take a direct vote on whether to strip Street of his authority. Rather, under a compromise by Supervisor Bill Campbell, the supervisors left Street's power unchanged but sought an added measure of oversight, authorizing the hiring of an outside consultant to assess the risk profile of the county's investments. The motion passed 4 to 1, with the lone no vote coming from John Moorlach.

Still, the supervisors appeared none too happy with Street himself.

"I'm troubled that every day I have to be your excuse," Supervisor Pat Bates said to Street. "The county should continue to put Mr. Street on credit watch. And I'm talking about your credit with the public."

A preliminary risk appraisal of county investments is due by Jan. 8, with a final evaluation to be completed by the end of next month.

The vote appeared to put to rest, at least for now, the political chaos that has trailed Street, although litigation and government investigations continue into his private business dealings before he entered office and his official actions since then. Federal investigators are looking into his handling of the affairs of a bankrupt trailer company in which he has been accused of self-dealing, and local prosecutors are examining his role in seeking to award contracts to people and firms to remodel the treasurer's office.

In his presentation to the board Tuesday, Street defended his office's decision to invest nearly $850 million -- 14% of the county's portfolio -- in complex debt instruments known as structured investment vehicles, more than half of which were subsequently placed on credit watch by Moody's Investors Service. Street said that two major banks have now made moves to shore up the value of the securities and that he believed the county would recover its full investment with interest.

The investments are "safe, strong and sturdy," he said. "Our team is managing the situation proactively. We are continuing to monitor these as we do with all our investments -- with the greatest of care."


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